CSL restructures amid R&D setbacks and vaccines uncertainty

CSL, Australia’s largest biotech company, is embarking on its most radical shake-up in years, slashing 15% of its workforce – around 3,000 roles – and spinning off its vaccine division into a standalone company.

CSL derives the majority of its revenue from CSL Behring, which produces treatments for blood disorders. Its Seqirus division, however, is also known globally for seasonal influenza vaccines, including Afluria and Flucelvax.

Formed in 2015 following CSL’s acquisition of Novartis’ influenza vaccine business, Seqirus generated $2.2 billion in revenue during the fiscal year ending June 30, contributing to total CSL revenue of $15.6 billion and a 14% rise in adjusted net profit.

While vaccine revenue grew slightly, CEO Paul McKenzie described the market as “disappointing” during the earnings call.

“We had some disappointments in our R&D pipeline and those disappointments make you take a hard look at how you are moving your portfolio forward,” McKenzie added.

The initial wave of job cuts will target R&D, though the impact will be smaller in Australia, with Melbourne remaining a central biotech hub for CSL.

U.S. vaccine policy has added pressure. Health and Human Services Secretary Robert F. Kennedy Jr. has intensified scrutiny on established vaccines, recently defunding mRNA vaccine R&D and cancelling $500 million in contracts, including one with CSL Seqirus. The company had previously licensed mRNA technology from Arcturus Therapeutics in 2022 to develop next-generation respiratory vaccines.

CSL projects that the combination of workforce reductions, cost cuts, and the vaccine spin-off could save up to $550 million over three years. The company plans to “balance the reinvestment of these savings in high priority opportunities.”

Further changes include the closure of 22 underperforming plasma centres in the U.S. during the 2026 financial year. CSL also announced a share buyback of A$750 million this year.

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